COMMENTS: High Finance

Capitol Hill is getting agitated about Wall Street. A pair of Congressional correspondents--CBS' Nancy Cordes and NBC's Kelly O'Donnell--covered the vote in the Senate on whether to debate the regulation of high finance. Republicans blocked debate, which needed 60 votes to go ahead. "Senate Democrats actually scheduled the vote knowing they would lose--and they did," mused NBC's O'Donnell, "because they see it as a political win, better able to paint Republicans as too friendly with Wall Street." CBS' Cordes summarized the to and fro: "Republicans say they will not be rushed on such major reforms. Democrats say Who is rushing? This legislation has been in the works for a year-and-a-half."

Meanwhile a pair of New York based financial correspondents previewed Tuesday's Senate hearings into Goldman Sachs' sales of derivatives as the financial bubble in the real estate housing market burst. CBS' Anthony Mason previewed this part of the testimony: "Early in 2007, our mortgage trading desk started putting on big short positions and made money, substantial money, in the third quarter as the subprime market weakened." ABC's David Muir predicted contradictory testimony from CEO Lloyd Blankfein: "We did not have a massive short against the housing market and we certainly did not bet against our clients."

Last week, only NBC's Kelly O'Donnell covered an earlier round of the same Senate investigation--into Moody's Investor Services and Standard & Poors. She reported on internal e-mails exposing the "huge conflict of interest" that led them to attach high credit ratings to junk. What did ABC and CBS cover instead? Congressional correspondents Jonathan Karl (no link) and Nancy Cordes told us about the internal investigation of workplace computer use at the Securities & Exchange Commission. Over a 30-month period, it found that 31 of the agency's 4,000 employees had surfed onto hardcore pornography Websites. CBS' Cordes put that number in proportion: "According to a Nielsen survey, in March alone, 29% of Americans with work computers used them access adult Websites."

The SEC! What a bunch of prudes!

To be fair to CBS, Armen Keteyian did cover the credit ratings agencies too. He zeroed in on just one investment, the infamous Abacus 2007-AC1 derivative that triggered the SEC's fraud lawsuit against Goldman Sachs. "When those toxic loans were packaged and presented to investors, they smelled more like French perfume. One big reason--the deal received the highest possible credit rating, stamped AAA."


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